HOW IT WORKS FOR YOU

INVESTMENT PHILOSOPHY

FREE MARKET PORTFOLIO THEORY

This overarching theory is a confluence of three areas of academic research: Efficient Market Hypothesis, Modern Portfolio Theory, and the Four-Factor Model. These components provide a scientific approach to investing using a globally diversified portfolio of stocks and bonds.

EFFICIENT MARKET HYPOTHESIS

Eugene F. Fama, in his doctoral thesis in 1965, detailed the hypothesis that due to market efficiency the price of a security at any given point in time incorporates and reflects all relevant information. He went on to win the Nobel prize in economics in 2013 for his research.

Based on this hypothesis, any attempts to “beat the market” are a matter of luck rather than any skill or investment strategy. “The market’s pricing power works against mutual fund managers who try to outsmart other participants through stock picking or market timing. As evidence, only 17% of US equity mutual funds have survived and outperformed their benchmarks over the past 15 years.”*

MODERN PORTFOLIO THEORY

Harry Markowitz, Merton Miller and William Sharpe won the Nobel Prize in 1990 for their collaborative work culminating in this theory. Originally put forth by Harry Markowitz in 1952, Modern Portfolio Theory (MPT) demonstrates that it is possible to create a portfolio that optimizes returns within a given level of risk and that a diversified portfolio with low correlation assets reduces risk.

“Diversification helps reduce risks that have no expected return, but diversifying within your home market is not enough. Global diversification can broaden your investment universe.” *

“Academic research has identified these equity dimensions, which point to differences in expected returns. These dimensions are pervasive, persistent, and robust and can be pursued in cost-effective portfolios.” *

THE SCIENCE OF INVESTING & HOW IT WORKS FOR YOU

“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”— Paul Samuelson, first American to win Nobel Prize in Economics

Based on decades of academic research, we apply the Free Market Portfolio Theory in the construction of your investment portfolio. Having an understanding of what you own and why you own the components of your portfolio is a cornerstone of our philosophy.

Our management is passive, not active. Active management relies on the judgment and experience of a manager to buy and sell based on forecasts and analytical research. Active managers are wrong over half of the time.

You will never receive a call from us touting the latest fad, or recommending a “hot” stock. We do not “time the market” or chase performance. Our investing is not based on the latest news or short-term economic outlooks. During times of market turbulence, we will help you manage your emotions so that you do not fall victim to making poor investment decisions.

No one has a crystal ball or special trading strategy that works as consistently as the Free Market Portfolio Theory. The financial markets reward long-term investors. People expect a positive return on the capital they invest and, historically, the equity and bond markets have provided growth of wealth that has more than offset inflation.

Let us and the market work for you!

Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.

Paul Samuelson

First American to win Nobel Prize in Economics

The Mechanics of Investing with Better Money Decisions

Theory is fine but what are the nuts and bolts of working with Better Money Decisions? Here are answers to some of your questions:

WHERE ARE THE ASSETS HELD?

A:We use TD Ameritrade Institutional (TDA) as our custodian. They hold all of your assets, send monthly statements and provide 24/7 online access to your accounts. Your accounts are covered by SIPC and FDIC insurance. We will ask you to complete TDA paperwork to open your accounts.

HOW DO I PAY MANAGEMENT FEES?

A:Fees are billed quarterly in advance and deducted directly from your account by TDA. Permission to withdraw fees is granted to TDA when you sign their account paperwork. You will always know exactly what you pay for our services. We have no hidden compensation and do not take commissions or kickbacks from any of the investments in your portfolio.

AM I LOCKED INTO A CONTRACT?

A:As part of the account set-up, we will ask you to sign our Private Client Agreement. The agreement details our responsibilities to you as well as your responsibilities to us such as letting us know if your financial circumstances have changed. You can cancel the agreement at any time and your fees are pro-rated.

HOW OFTEN DO I MEET WITH YOU?

A: We prefer to meet with all of our clients at least twice per year. These meetings can be in person, over Skype or via phone. We also communicate via text and email. So we accommodate whatever works best for you!

Most importantly, we are available when you need us. Let us know how we can help. If you have a decision you need to make, contact us and we will get back to you quickly.

Better Money Decisions ADV / 844-507-0961 REGISTRATION Better Money Decisions, LLC, may transact business only in states in which it is registered, or in which it is excluded or exempted from registration. Better Money Decisions, LLC, is currently registered in the State of New Mexico.